$1.8 billion loss on NSW power sale

The former NSW Labor government’s $5.3 billion partial electricity privatisation netted $1.2 billion for the state, according to a report released today.

The state’s Auditor-General, Peter Achterstraat, said on Wednesday that government had lost $1.8 billion on the sale of the rights to trade in the electricity output of the state-owned generators Eraring Energy and Delta West.

The sale of retail electricity businesses EnergyAustralia, Integral Energy and Country Energy made a profit of $3.08 billion.

Origin Energy and Hong Kong-listed TRUenergy purchased the so-called gentrader assets and electricity retailers in a $5.3 billion deal finalised weeks before the March state election.

“The proceeds from selling the generation output represented less than half of the value of government power station assets at the time of the sale," Mr Achterstraat said.

His report comes after a special commission of inquiry headed by former Federal Court judge Brian Tamberlin, QC, found on Monday that the sale achieved value for money for taxpayers.

The inquiry said selling the generation rights was a “second best option" but was appropriate in the circumstances because the then Coalition opposition, led by now Premier Barry O’Farrell, blocked a full sale in parliament.

Mr Achterstraat said: “The significant loss incurred by the electricity generation businesses was primarily due to write-downs in the values of the power stations to reflect their sale price."